A properly drafted trust can be an incredibly effective tool to use your resources in a way that will help protect children, even adult children, after you have passed away. From what risks might they need protection? I often refer to them as the “complications of life.” Common examples are the devastating financial effects of debt, bankruptcy, divorce, and addictions.
Probably the most common concern shared with me is the child who struggles with money. While we cannot usually protect an adult child from poor choices they may make with their own money, that does not mean the money you pass on to them need be subject to those same poor choices. It is possible to ensure your money is used to benefit your child rather than to further enable whatever struggles your child may have.
For example, even after your passing, a trust allows your money to be used to help a child struggling with significant financial challenges, without simply turning over your money to his or her creditors. The same is true to help a child struggling with addictions, possible divorce or virtually anything else that threatens to jeopardize how you would like your money to be used.
What if your adult child passes prematurely, leaving grandchildren too young to provide for themselves? If you have concerns about your child’s share ending up with your son-in-law or daughter-in-law, a trust can solve that concern.
There are ways to make sure your money is distributed as you wish, despite the complications of life. Indeed, the solution need not be overly complex or expensive, but it will not happen automatically.
© 2016 Steven J Wright